Carl Paladino, New York GOP Gubernatorial candidate, answers a reporter's question at a campaign stop in Buffalo last week. / The Associated Press

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ALBANY -- As Carl Paladino, the Tea Party-backed Republican gubernatorial candidate, makes his case to voters, the lucrative real estate and development business he has built is being scrutinized for its reliance on government contracts and tax breaks.

Democratic opponents charge his companies' web of leases with government agencies, tax credits and political contributions to both parties over the years contradicts a platform that pledges to reduce state spending and taxes.

Good-government advocates believe it's another sign that the state's lax campaign finance laws, especially rules governing how much one can donate, need an overhaul.

And critics of the Empire Zone program, which provided Paladino's firms with millions of dollars in tax breaks in exchange for little job growth, point to the ineffectiveness of the now-expired economic development program.

State records obtained by Gannett's Albany Bureau through a Freedom of Information request show Paladino received $3.4 million in Empire Zone tax benefits over the last decade, but created only 29 jobs, or $118,305 in tax breaks for each job created.

In return, records show he's invested $18.9 million in depressed properties in western New York.

One of Paladino's companies, J-P Group LLC, was decertified from the program in 2009 by the state after it received $883,807 in tax credits and failed to create a single job, records show.

It was one of 100 companies kicked out of the program that year following legislative changes to the program that tightened job creation requirements.

Records also show 11 companies Paladino has financial ties to received tens of thousands of dollars each in tax benefits, but in most cases created fewer than five jobs.

Another company, Michigan-Seneca Group Inc., received $41,759 in tax breaks, but reported zero jobs created.

Paladino's campaign manager Michael Caputo rejects the criticism of the program, saying thousands of jobs in Buffalo would not have been created without the tax credits.

"The Empire Zone program was designed in large part for development in the inner cities," Caputo said.

"If they (Paladino's opponents) had done their homework, they would find that Carl Paladino was no different from any other developer that has participated in the program at all. If it weren't for the Empire Zone, developers would not be developing in the inner cities."

Paladino has argued that J-P Group's decertification was illegal and is appealing the action. He's also defended the state contracts and political contributions, pointing to the realities of doing business in New York.

Caputo also said that Paladino has helped create thousands of jobs and that he has lured new tenants and businesses to the economically distressed Buffalo area, aided through the tax breaks.

The 22-year-old Empire Zone program designates geographic boundaries where a business can receive credits for property, capital and payroll taxes based on job creation.

More than 9,000 companies participate in the Empire Zone program, which provides $600 million a year in tax credits.

The program, criticized for its expense and lax oversight, was scrapped in June by the state Legislature and replaced with the Excelsior program, which targets job growth in specific industries and provides fewer tax credits.

Critics of the Empire Zone program say Paladino's lack of job creation is not an indictment of him, but a sign of how ineffective the program was.

"I think what it helps to do is show what's wrong with how the program was structured," said Frank Mauro, executive director of the Fiscal Policy Institute, a liberal think tank.

"I think the problem is a lot of what happened in his case was legal, but the law was written in a way that we didn't get our moneys worth."

He has a reported stake in more than 20 firms with businesses that include leasing commercial real estate to government agencies, property development, parking lot management and the operation of several convenience stores.

Paladino's firms are landlord to 13 state agencies and several Erie County offices, according to his financial disclosure statements, with contracts whose long-term worth totals more than $50 million.

The most recent, a contract with the state Workers Compensation Board worth $2.8 million over 10 years, took effect Oct. 1, according to the state Comptroller's Office.

Paladino, whose net worth is estimated to be $150 million, has pledged to use at least $10 million of his own money to take on the well-funded Democratic candidate and frontrunner Andrew Cuomo.

Recently, Paladino has solicited fundraising help on his website, which includes calling on supporters to contribute to a "money bomb."

Campaign Chairwoman Nancy Naples appeared at the end of a three-minute campaign commercial aired Thursday to appeal for money.

Paladino himself has been generous over the last decade with his own political contributions.

He's donated $463,123 to politicians and candidates between 1999 and 2009, an analysis by the New York Public Interest Group revealed.

Much of the money -- nearly $245,000 -- has gone to Republican candidates.

One of the biggest beneficiaries of Paladino's contributions includes Erie County Executive Chris Collins, a Republican, who has received $20,400 from Paladino over the years.

But he also has donated $190,733 to Democrats, including $10,000 to Gov. David Paterson.

The money includes direct contributions from Paladino and money donated through his various enterprises.

With his platform of scaling-down government, reducing taxes and ending a culture of corruption in Albany, the state Democratic Party has seized on Paladino's financial dealings and turned one of his perceived strengths as a candidate -- his status as an Albany outsider -- and portrayed him as a consummate insider.

A television commercial produced by the party paints Paladino as part of the "Albany swamp."

A television commercial for Cuomo says Paladino has "reaped millions in questionable tax breaks and other sweetheart deals."

Caputo, the campaign manager for Paladino, said no favors were ever traded in exchange for political contributions. Paladino also plans to put his assets in a blind trust if elected governor.

"It's interesting how Carl's leases are political fodder, but are OK by the general services office and the attorney general's office," Caputo said.

"They don't know how to run a business to save their lives, and they've never run a business in their entire lives."

Cuomo is the current attorney general.

Though it isn't unique for a businessman to have so many interests before the state, the Paladino case shows that campaign finance laws should be changed, said Blair Horner of the New York Public Interest Research Group, a good-government organization.

"Right now the whole system is tainted by the money that comes in from those who have business before state government," Horner said, adding that the campaign donations of people with state contracts should be restricted.

"Everyone has a constitutional right to make a campaign contribution, no one has a constitutional right to a state contract," he said. Gannett reporter Cathey O'Donnell contributed to this article.